That’s according to the 2021 Deloitte Holiday Retail Survey, which queried 4,315 consumers and 30 retail executives about shopping insights during the second holiday season of the COVID-19 pandemic.
Consumers are expected to spend $448 over the Thanksgiving period, representing an increase of 12% from last year and above pre-pandemic levels, the survey found. Average holiday spend increased to $1,463, up 5% from last year. However, average spend was slightly higher in 2019 at $1,496.
Higher spending this year is helped along by the reopening of experiences, with spending being driven by higher-income households. At the same time lower-income households continue to struggle, according to the survey. The majority (65%) of those planning to skip shopping this year are from lower-income households.
In-store shopping regains some lost ground this year, but online shopping is still elevated. One-third of holiday spend, or $440, comes from in-store this year, while 62%, or $924, comes from online. Retail executives expect online shopping to remain popular, and 40% of executives expect to see double-digit growth.
The holiday season faces new supply chain challenges this year, leaving retail executives concerned about shipping delays and stock being out. A whopping 64% of retail executives are worried about not receiving inventory on time, while 75% of shoppers are concerned about stockouts.
The supply chain issues have led consumers to shop earlier this season, and 68% of consumers plan to begin shopping before Thanksgiving, compared to 61% in 2020. Another 32% plan to start shopping on Thanksgiving or later, versus 39% in 2020. Retailers have pushed sales up, with 67% of retail executives expecting holiday shopping to start one to two weeks earlier.
“Thanksgiving has traditionally signaled the kick-off to the holiday shopping season,” Rod Sides, vice chair of Deloitte and U.S. retail, wholesale and distribution leader, said in a statement. “However, stockouts and inflation have caused consumers to start buying earlier to ensure they can get the best price for what they want, while it’s available. Retailers should be prepared to welcome shoppers throughout the holiday weekend as they prioritize items they can purchase and take home that day. In situations where supply chain and inventory are a challenge this season, retailers will need to have a strong substitution strategy in place to keep shoppers in the store or online.”
Supply chain worries are not the only challenges this year with inflation rates reaching new highs. Half of retail executives expect prices to increase this year, while 7 in 10 consumers believe the same. Nearly 40% of consumers say things cost more this year in general, while 50% are spending less thanks to higher food prices.